Category: Games

Chess grandmaster markets in everything

But for some players, securing a prestigious title meant more than just playing well. It is an open secret in chess that many players cut side deals with tournament organizers and other top competitors that help them achieve norms they might have struggled to get legitimately.

This culture touched the Momot club. Many of its members acquired their grandmaster credentials in Crimea, at tournaments in places like Sudak and Alushta that were known as “norm factories” — where, for as little as $1,000, organizers would make sure players accumulated enough points for a norm.

But there were other, more subtle, ways to succeed, too. Far from prying eyes, secret agreements and cash exchanges to arrange results were not uncommon, according to interviews with chess players and FIDE officials. In a sport so wholly obsessed with status, title and rank, even selling a game could be accomplished for the right price.

Mikhail Zaitsev, who achieved the rank of International Master and is now a chess coach, estimated that of the world’s roughly 1,900 living grandmasters, at least 10 percent have cheated one way or another to acquire the title. Shohreh Bayat, one of the leading arbiters in chess, describes such arrangements in the plainest terms. “Match fixing,” she said, “is cheating.” Some hopefuls didn’t even have to play a game of chess to get the points they needed: Some tournaments, she said, took place only on paper.

Here is more from Ivan Nechepurenko and at the NYT.

Which media have proven sticky as pandemic has diminished?

The single biggest new media habit to be formed during the pandemic appears to be gaming. The extra hour per week that people spent gaming last year represented the largest percentage increase of any media category. And unlike other lockdown hobbies, it is showing no sign of falling away as life gets back to normal. It has become “a sticky habit”, says Craig Chapple of Sensor Tower. He finds that last year people installed 56.2bn gaming apps, a third more than in 2019 (and three times the rate of increase the previous year). The easing of lockdowns is not denting the habit: the first quarter of 2021 saw more installations than any quarter of 2020. Roblox, a sprawling platform on which people make and share their own basic games, reported that in the first quarter of this year players spent nearly 10bn hours on the platform, nearly twice as much time as they spent in the same period in 2020.

And:

…whereas all other generations of Americans named television and films as their favourite form of home entertainment, Generation Z ranked them last, after video games, music, web browsing and social media.

Here is more from The Economist.

Better Crowdfunding

In 1998, I designed the “dominant assurance contract” (DAC) mechanism for producing public goods privately. In my latest paper, just published in GEB written with the excellent Tim Cason and Robertas Zubrickas we test the theory in the lab and…it works! Kickstarter hadn’t yet been created when I first wrote but the DAC mechanism can now be easily explained as a Kickstarter contract with refund bonuses. On Kickstarter and other crowdfunding sites you contribute to a project and if a contribution threshold isn’t reached you get your money back. The Kickstarter contract is useful but it’s still easy for a good project to fail because there are many equilibria with non-funding. For example, if I think that you won’t contribute then I may decide not to contribute and if I don’t contribute then you may decide not to contribute. Neither of us can do better by contributing, given the other person is not-contributing, and so non-contributing is a Nash equilibrium (see my talk at the Foresight Institute for more details). Now introduce refund bonuses which pay out only if the threshold is not reached. Now if I think that you won’t contribute then I want to contribute, to earn the refund bonus, and the same is true for you. Indeed, the only equilibria in the crowdfunding game with refund bonuses have the project being funded. Thus, a nice feature of the refund bonus game is that in equilibrium the refund bonuses are never paid!

To test the theory we (mostly Tim and Robertas!) created an environment very similar to that faced by people on Kickstarter. Namely, there are multiple projects to choose from, each with different private payouts and each project has a contribution threshold and some projects offer refund bonuses. We test a variety of different types of refund bonuses including fixed (e.g. $10) and proportional e.g. (20% of your contribution) and also early refund bonuses (a refund bonus if the contribution threshold is not reached and you agreed to contribute in the first half of the funding period) or for contributions at any point in the game. Our research leads to three important conclusions.

First, without refund bonuses only ~30% of socially valuable projects succeed (perhaps coincidentally almost the exact same as on Kickstarter). But with refund bonuses the success rate increases by about 50% to 50- 60% and it doesn’t much matter much what type of refund bonuses are used!

Second, early refund bonuses have some useful properties. A key to the mechanism is that it quickly makes many contributors pivotal. At the beginning of the game it’s in no single individual’s interest to fund the public good but as others contribute there comes a time when the contribution necessary to push the total funding over the threshold is less than the value of the public good to the individual–thus, for purely self-interested reasons, a potential contributor can benefit by pushing funding just over the threshold. We say such contributors are pivotal. Early refund bonuses make contributors pivotal sooner and we think this gives people time to recognize that pushing funding over the threshold is in their interest. In addition, when more people contribute early this sends a signal of social cooperativeness which also appears important to fund public goods.

Third, refund bonuses pay for themselves! In theory, refund bonuses are never paid but in practice, as we have seen, some socially valuable projects fail even with refund bonuses. Nevertheless, for reasonable markups it’s still in an entrepreneur’s interest to use refund bonuses because the greater success rate more than pays for having to pay modest refund bonuses when a project fails.

We think refund bonuses can substantially improve crowdfunding and we hope to partner with a crowdfunding site to run a field experiment. Contact me if interested!

Read the whole thing.

Solve for the football culture equilibrium that is Mexican

Many fans shrug off accusations of homophobia and insist the chant is just a joke. “We do not scream at the goalkeeper because of his sexual preference, we don’t even care about it,” a YouTube commenter on a 2016 public-service video denouncing the chant wrote. “We shout to create chaos, because it is part of the atmosphere of a stadium in Mexico.”

For some, the chant merely illustrates wider homophobia in society.

Here is the proposal of an American academic:

“Convince fans that it brings bad luck to their own team,” Doyle said, “and this nonsense will stop.”

Now that’s a plan.  The actual (new) rule is to stop play if the chants become too extreme:

Nearly two years ago, FIFA approved a disciplinary code that allows referees to end matches if fans use chants or display behavior deemed to be homophobic or racist. However, because of COVID-19, Mexico’s national team has played few games in front of fans since the rules were adopted.

But when the team returns to the field May 29 to face Iceland in Arlington, Texas, Yon de Luisa, the Mexican federation’s president, said the new code will be strictly enforced.

If you are feeling just a bit generous in interpretation:

There is vigorous debate over whether the chant is offensive since the offending word is said to have many meanings in Spanish, one of which is a derogatory slur used to demean gay men.

Some countries should be just a bit more woke!

Can you call this a new service sector job?

Dave Taube has won a computer, a whitewater rafting trip, and several grills. There’s also the kayak, the powder-blue Coors Light onesie, and the Bruce Springsteen tickets. He recently took home $10,000 from Cost Plus World Market in its “World of Joy” sweepstakes. Recently, he found himself in the running for a trip to Antarctica, which would be the thirty-sixth vacation he’s won. His photo and caption, submitted in response to the prompt, “Tell us what you miss about international travel,” got enough votes to make the top 20. Next, the entries went to judging. In Taube’s photo, he’s slung with cameras and wearing safari duds, half-smiling, with a silver goatee. Strategically, he submitted his caption as a poem to make his entry distinct.

Taube, who is 65 and a decades-long resident of the Pacific Northwest, is a sweeper, a term that distinguishes the committed competitor from the casual, onetime entrant. Each day, he enters about 60 sweepstakes—which are random draws—and contests—which are judged.

And this:

Years ago, he entered a contest for “the most boring person in the Pacific Northwest.” He won a whitewater rafting trip, a plane ride, and a certificate for a tandem parachute jump. He sold the certificate.

He is producing…”contest liquidity”?  Publicity?  Contest legitimacy?  In any case he is paid for his labors, albeit in kind.  Here is the full story.

Maradona Plays Minimax

This paper tests the theory of mixed strategy equilibrium using Maradona’s penalty kicks during his lifetime professional career. The results are remarkably consistent with equilibrium play in every respect: (i) Maradona’s scoring probabilities are statistically identical across strategies; (ii) His choices are serially independent. These results show that Maradona’s behavior is consistent with Nash’s predictions, specifically with both implications of von Neumann’s Minimax Theorem.

From Ignacio Palacios-Huerta.

NFT virtual horse markets in everything

Is it simply that we have made gambling too much fun and too intriguing?  Or should we upgrade our view of the welfare consequences of gambling?:

On Zed Run, a digital horse racing platform, several such events take place every hour, seven days a week. Owners pay modest entry fees — usually between $2 and $15 — to run their steeds against others for prize money.

The horses in these online races are NFTs, or “nonfungible tokens,” meaning they exist only as digital assets….

“A breathing NFT is one that has its own unique DNA,” said Roman Tirone, the head of partnerships at Virtually Human, the Australian studio that created Zed Run. “It can breed, has a bloodline, has a life of its own. It races, it has genes it passes on, and it lives on an algorithm so no two horses are the same.” (Yes, owners can breed their NFT horses in Zed Run’s “stud farm.”)

People — most of them crypto enthusiasts — are rushing to snap up the digital horses, which arrive on Zed Run’s site as limited-edition drops; some of them have fetched higher sums than living steeds. One player sold a stable full of digital racehorses for $252,000. Another got $125,000 for a single racehorse. So far, more than 11,000 digital horses have been sold on the platform.

Alex Taub, a tech start-up founder in Miami, has purchased 48 of them. “Most NFTs, you buy them and sell them, and that’s how you make money,” Mr. Taub, 33, said. “With Zed, you can earn money on your NFT by racing or breeding.”

One implication here is that automation is never going to destroy all of the jobs.  Here is the full NYT story.

“Free-floating credibility” is underrated

The presence of a minuscule risk for some of the adenovirus platform Covid vaccines means that the FDA has put a hold on J&J and still won’t approve AstraZeneca.

In response to critics, the FDA says that their credibility is on the line.  If they allow vaccine use to proceed, and a modest number of people die as a result (with a big increase in net lives saved), the FDA and its defenders claim that people will lose faith in the FDA.  Yet that is exactly the wrong thing to say, it is self-serving, and it exacerbates the problem at hand.

When the FDA announces that they have to ban a vaccine because its credibility is on the line, that very announcement puts their credibility on the line.  It is a simple two-line proof.  Either they are lying about whether their credibility is on the line, in which case they have wrecked their credibility with the lie.  Or they are telling the truth, in which case by definition their credibility is indeed on the line.

One lesson is that you should not try to extend your credibility too far, because you will end up unduly constrained.

For purposes of contrast, consider alcoholic beverages.  At the federal level they are regulated by the Alcohol and Tobacco Tax and Trade Bureau (who are they again?), and also various state and local authorities.

As a result of this unusual, Prohibition-rooted distribution of authority, alcohol does not come with nutritional labeling.

Now, in that setting, if a bunch of kids die from binge drinking, the credibility of the Bureau is not much damaged.  The Bureau does not have to ban alcohol on the grounds that if it does not, the credibility of the Bureau will be ruined.  The Bureau simply never put its credibility on the line in this manner.

Now you might favor a tighter regulation of alcohol for some reason, but you could achieve such regulation without tying up the credibility of the ATTT Bureau in knots.  Similarly, the Department of Transportation regulates road safety (again with state and local authorities as well), but it has not put its credibility on the line when 40,000 or so Americans die each year on the roads.  Again, maybe they should enforce tougher safety standards, but they shouldn’t tie their credibility to getting road deaths down to one hundred, and indeed they do not.  They end up with more degrees of regulatory freedom.

Let’s say I were to announce that my credibility as a public intellectual were to depend at how I would fare at darts on British pub night.  That would be a big mistake, for multiple reasons.  It is like with the FDA.  If I am lying about that credibility tie, I hurt my credibility as a public intellectual.  If somehow I am telling the truth, well let’s just hope everyone else stays home that evening because my credibility is going to take a beating.

What I call “free-floating credibility” is underrated.

And that is precisely what defenders of the FDA destroy when they…defend the FDA.  They make the FDA worse.

NB: You are “out of your lane” commenting on this analysis unless you have studied game theory with Thomas Schelling.

Those new Filipino service sector jobs

In the Philippines, one popular blockchain-based game is even providing pathways out of poverty and helping spread the word about novel technology. Created by Sky Mavis, a Vietnamese startup, Axie Infinity is a decentralized application (dapp) on the Ethereum blockchain where players breed, raise, battle and trade adorable digital critters called Axies.

Ijon Inton, an Axie player from Cabanatuan City, which is about 68 miles north of Manila in the province of Nueva Ecija, first learned about it in February of this year when his friend stumbled across an explainer video on YouTube. Intrigued by the “Play to Earn” element of the game, he decided to give it a go.

“At first I just want to try its legitimacy, and after a week of playing I was amazed with my first income,” said Inton, who is currently earning around 10,000 PHP ($206) per week from playing the game around the clock.

Inton soon invited his family to play, too, and after a few weeks, he also started telling his neighbors. A crypto trader since 2016, Inton helped his friends set up a Coins.ph account so they could buy their first ETH and get started. Now, there are more than 100 people in his local community playing to earn on Axie, including a 66-year-old grandmother.

Here is the full story, via Nicanor Angle.  How would you have responded to these sentences a decade ago?:

“We definitely want to get people who are outside of Ethereum, outside of the dapp space, outside of NFTs, into Axie,” Jiho said. He has observed other Axie play-to-earn community clusters in Indonesia and Venezuela, but thinks this might be the first evidence of a multi-generational household of dApp users.

What lies next in store for us?

Ola Malm on the future and industrial organization of chess

It was great to see your “Thursday assorted links” link regarding chess. It has been fascinating to follow the recent online boom to which the game has been subject and to think about what it may mean for the organization, and business, of chess over time.

I speculate, of course, but – as to what the future holds – I believe at least one possible path for the sport runs as follows:

1. The three major chess-focused online platforms (chess.com, lichess, and chess24) reduces to one through a self-reinforcing cycle of greater revenue concentration, the attainment by one party of progressive technical superiority, and the increasing convergence of the chess-playing public on a single provider.

2. The market leader signs exclusivity agreements (governing non-FIDE play) with a significant portion of top players and becomes the de-facto organizer of most commercially significant tournaments. In contrast to (1), this could conceivably happen quite quickly, as it involves only a limited set of individuals.

3. The centralization of elite-level play on a single platform enables that platform’s Elo rating to emerge as the chess world’s most important manifestation of achievement, thus furthering the leading provider’s competitive position (and affording it, through subscription fees, the financial means of accelerating (1) and of maintaining (2)).

4. FIDE’s tight grip on the sport is somewhat loosened, and the organization reverts to being something more akin to what it used to be and was originally intended to be – a (gentler) gentlemen’s club (in the English, rather than the American-English, sense of the term) focused on advancing the sport of chess.

Step (2) is, to a certain extent, already underway in the form of Nakamura’s link with chess.com and Carlsen’s ownership interest in Play Magnus (which owns chess24 and hosts the Champions Chess Tour). Attempting to negotiate individual agreements with single players would very likely turn out no easier than herding cats (and a rather resourceful and independent sort of cat, at that); rather, I believe whichever party may seek to implement a form of player exclusivity would find it easier to, on a unilateral basis, simply issue rating-based cash compensation (in exchange for promises of exclusivity) to the top-10-ranked (or top-50-ranked – the precise number is of course unimportant) Grandmasters. To rate players, the provider could adopt the current FIDE ranking as its starting position, but thereafter “fork” it (much like an open-source piece of code is forked) and base future rankings (for payment purposes) exclusively on play on its own platform (to enable (3)).

Some would no doubt scoff at such a development as unwelcome commercialization. And, yet, I think it would constitute a step, if not indisputably forward, certainly not backward, for chess. International sports tend to be organized in one of two ways: through one-nation-one-vote Swiss associations (such as soccer’s FIFA); or through commercial corporations (such Formula1’s Liberty Media). Time has undeniably imbued governing bodies in the former category with a certain cachet, but it has also made many of them inefficient and corrupt, as their governance systems – designed for a pre-WWI European world of volunteerism and gentlemanly conduct – have failed to adapt to, and to ward off, an extent of contemporary cynicism. If the Guardian is to be believed, FIDE has not been entirely spared: https://www.theguardian.com/sport/2016/jun/03/chess-rights-multimillionaire-model-agency-owner-david-kaplanhttps://www.theguardian.com/sport/2016/jun/03/chess-fide-president-offshore-firms-rights-kirsan-ilyumzhinov. I think most sports, including chess, would be no worse managed – in the sense of attracting both a broad player base as well as a vibrant elite tier – were they to convalesce around corporate organizations rather than Swiss associations.

I am pleased to report that Ola was an earlier Emergent Ventures recipient.

My days as a teenage chess teacher

I’ve already blogged my earlier job working in the supermarket, so I thought I would add a few remarks on my very first job as chess teacher, which I did at ages 14-15.

I had three regular students, two adults (about 50 and late 20s) and one a younger chess prodigy himself, maybe 10 or 11, plus some other occasional students.  I would have had more students if they (or the parents) did not have to pick me up and drive me to the lesson site.  By the way, at that time no one thought it was strange that relative strangers would simply come and pick me up in their cars and take me away.

From this job, I learned a few things rather quickly:

1. At the time a 14-year-old paid chess teacher seemed odd.  But if you just did something, the world might accept it.  Make other people tell you no, don’t do that preemptively yourself.

2. Chess teaching isn’t mainly about chess.  A chess teacher has to have a certain mystique above all, while at the same time being approachable.  Even at 14 this is possible.  Your students are hiring you at least as much for your mystique as for the content of your lessons.

3. Not everyone taking chess lessons wanted to be a better chess player.  For some, taking the lesson was a substitute for hard work on chess, not a complement to it.  The lesson for them was a fun social experience, and it kept the game of chess salient in their minds.  They became “the kind of person who takes chess lessons.”  I understood this well at the time.  Some of the students wanted to show you their chess games, so that someone else would be sharing in their triumphs and tragedies.  That is an OK enough way to proceed with a chess lesson, but often the students were more interested in “showing” than in listening and learning and hearing the hard truths about their play.

4. Students are too interested in asking your opinion of particular openings.  At lower-tier amateur levels of chess, the opening just doesn’t matter that much, provided you don’t get into an untenable position too quickly.  Nonetheless openings are a fun thing to learn about, and discussing openings can give people the illusion of learning something important, if only because you can share opening moves with the top players and thereby affiliate with them.

5. What I really had to teach was methods for hard work to improve your game consistently over time.  That might include for instance annotating a game or position “blind,” and then comparing your work to the published analysis of a world-class player, a’ la Alexander Kotov’s Think Like a Grandmaster.  I did try to teach that, but the demand for this service was not always so high.

6. The younger chess prodigy I taught was quite bright and also likable.  But he had no real interest in improving his chess game.  Instead, hanging out with me was more fun for him than either doing homework or watching TV, and I suspect his parents understood that.  In any case, early on I was thinking keenly about talent and the determinants of ultimate success, and obsessiveness seemed quite important.  All of the really good chess players had it, and without it you couldn’t get far above expert level.

7. I don’t remember exactly how much I was paid, but it felt like a lot of money at the time.  But when I stopped playing chess, I also stopped giving chess lessons.  I felt I had learned — and earned — from it what I could.

Betting and Bonding with the Kids

Jeff Kaufman has some good parenting tips:

A few weeks ago Anna (4y) wanted to play with some packing material. It looked very messy to me, I didn’t expect she would clean it up, and I didn’t want to fight with her about cleaning it up. I considered saying no, but after thinking about how things like this are handled in the real world I had an idea. If you want to do a hazardous activity, and we think you might go bankrupt and not clean up, we make you post a bond. This money is held in escrow to fund the cleanup if you disappear. I explained how this worked, and she went and got a dollar:

When she was done playing, she cleaned it up without complaint and got her dollar back. If she hadn’t cleaned it up, I would have, and kept the dollar.

Some situations are more complicated, and call for bets. I wanted to go to a park, but Lily (6y) didn’t want to go to that park because the last time we had been there there’d been lots of bees. I remembered that had been a summer with unusually many bees, and it no longer being that summer or, in fact, summer at all, I was not worried. Since I was so confident, I offered my $1 to her $0.10 that we would not run into bees at the park. This seemed fair to her, and when there were no bees she was happy to pay up.

Over time, they’ve learned that my being willing to bet, especially at large odds, is pretty informative, and often all I need to do is offer. Lily was having a rough morning, crying by herself about a project not working out. I suggested some things that might be fun to do together, and she rejected them angrily. I told her that often when people are feeling that way, going outside can help a lot, and when she didn’t seem to believe me I offered to bet. Once she heard the 10:1 odds I was offering her I think she just started expecting that I was right, and she decided we should go ride bikes. (She didn’t actually cheer up when we got outside: she cheered up as soon as she made this decision.)

I do think there is some risk with this approach that the child will have a bad time just to get the money, or say they are having a bad time and they are actually not, but this isn’t something we’ve run into. Another risk, if we were to wager large amounts, would be that the child would end up less happy than if I hadn’t interacted with them at all. I handle this by making sure not to offer a bet I think they would regret losing, and while this is not a courtesy I expect people to make later in life, I think it’s appropriate at their ages.

I also recommend the board game Wits and Wagers. In the game you make bets based on questions like “In what year was the computer game Pong released? or “How many ridges are on the outside of a dime.” It’s a clever and fun game because it teaches you not only to estimate and bet accordingly but also to adjust your bets based on seeing how other people bet. Thus, it often happens that a player will less background knowledge can win, precisely because they are less confident and so pay more attention to the information available in other people’s bets. Aumann would approve.

Hat tip: Julia Galef.

*Queen’s Gambit* (no real spoilers in this post)

I’ve now seen a few episodes, and I have a few comments on the chess:

1. No player, including Magnus Carlsen, can become that good that quickly, without a lot of learning and losing along the way.

2. They show the players moving too fast, though for dramatic reasons this is easy enough to understand.

3. The Sicilian was indeed very popular in 1963, but not quite that popular.

4. It captures the feel of earlier U.S. chess tournaments very well, noting that my own participation came later but things didn’t change much.

5. At the time the Rossolimo was in fact an unusual response to the Sicilian, though it is not now.  The show got this right (the protagonist claims she was very surprised by 3.Bb5) — don’t be fooled by the subsequent evolution of the game.

Dramatically, I would say it is “decent and watchable,” and the clothes and hotel scenes are good.  The characterization of the mother does not feel entirely consistent.  There is an underlying autism theme, mostly handled well, though mainstream reviewers seem to be thrown off the scent by the woman’s charm and good looks.  I will let you know if I have further observations.